Common Errors in Business Credit Reports and How to Fix Them
Did you know that anyone can check your business credit score? That’s why it’s always a good idea to use your credit cards properly and keep a good score. If not, you can actually create financial damage. That is, having a low score on your report can make it difficult to secure a small business loan. Now imagine this scenario: you apply for financing but get rejected. You ask the lenders why you were turned down and they say it was due to negative information that came up on your business credit report. So you dig into it and find out that the negative information is actually a mistake.
It can definitely be frustrating to come across mistakes on your credit report (that shouldn’t be there in the first place!) which keep you from qualifying for a loan.
So let’s take a look at some of the most common errors on business credit reports and how you can fix them.
A mix up in business information
Sometimes your business credit report might list accounts that belong to another business. The reason for this is because of the way that credit bureaus add information to credit files. The way it works is that a creditor reports information to a business credit bureau. The bureau then matched the account of your business and adds it to your business’ credit report. In order to match it up, bureaus usually will pair up the account to a business’ name and address, which don’t have to be exact.
So if another business has a similar name or address to your business, their business’ account might accidentally end up on your business’ credit report. The credit bureaus data system process leaves room for a lot of errors and mix ups.
Number of years in business
Most business owners ignore this mistake, but it’s actually quite important. The age of your business matters to lenders when you apply for a business loan. If your business credit report says that you’ve only been in business for 4 years but it has actually been 9, you need to get it fixed as soon as possible. Additionally, if an account on your business’ credit report is reported as younger than it should actually be, the mistake will impact your business credit score.
As you might already know, credit reports contain a lot of personal and sensitive information. Unfortunately, businesses don’t have any protection against this. That is, you don’t have any legal right to your business credit reports’ privacy. On top of that, your business credit reports information is public, so anyone can get their hands on your identity and use it for their own benefit. When a thief has access to your business’ personal information, they might use it to open accounts in the name of your business. So if you come across any additional loans or charges that you never made, make sure to report and clear it up immediately because it can bring down your credit score.
The good news is that the business credit bureaus allow you to dispute errors on your business credit report when you discover them. Here are the steps to fixing those mistakes:
- Check your business credit report with all of the major credit bureaus often and look closely for any inaccuracies
- Compile a list of any incorrect information you come across, even if it doesn’t seem to be that big of an issue
- Create and initiate a dispute with each business credit bureau separately. In this process, you have to fill out and submit a form.
- If your dispute is overlooked, and you know for sure that the information on your credit report is wrong, follow up with it. In order to strengthen your claim, submit additional supporting documents.